Kenya mulls strategy to reverse decline of exports to Tanzania


Kenya is planning to develop a strategy to reverse the decline of exports to Tanzania, the country’s export promotion agency said on Thursday.

Peter Biwott, the CEO of the Export Promotion Council (EPC), told journalists in Nairobi Kenyan exports to Tanzania declined from 348 million U.S. dollars in 2016 to 285 million dollars in 2017.

“We are looking at some options for sustaining Kenyan exports to Tanzania which is the most lucrative market in the East African region,” Biwott said during a media briefing on Kenya’s participation in the Dar es Salaam International Trade Fair to be held from June 28 to July 13.

Biwott said that Kenya plans to enhance its engagement with Tanzania by changing tact and becoming even more aggressive because Nairobi’s needs Dar es Salaam much and vice versa.

Data from the ministry of trade indicates that Kenya imported goods worth 172 million dollars from Tanzania in 2017, up from 128 million dollars the previous year.

Tanzania is also a major recipient of Kenya’s Foreign Direct Investment as the overall investment portfolio currently stands at 1.68 billion dollars.

The investment sectors range from horticulture, financial, insurance and real estate sectors.

Biwott noted that although Kenya continues to enjoy a trade surplus within the East African Community (EAC) bloc, it is faced with a declining trade, a worrying trend that remains a critical focus of the country.

The export agency also plans to undertake a diagnostic study to unearth the root causes of the high-level oscillations in Kenya’s export to the Tanzanian market and the relative declining export performance within the EAC.

Biwott blamed the dwindling exports to Tanzania to intensification of product substitutes from other sources as well new suppliers from other countries entering into the Tanzanian market.

He noted that even as Kenya is working to increase its trade surplus, Tanzania is also keen on gaining a balanced trade with Nairobi and is in effect pursuing all options to increase her products into the country while at the same time, minimizing imports into its market from Kenya as part of its industrial policy agenda.

According to Biwott, Kenya will intensify its promotional activities in Tanzania in order to increase awareness of Kenyan goods in the Tanzanian market.

In order to address the issues of non tariff barriers that are common between Kenya and Tanzanian trade, bilateral talks involving senior government officials from Kenya and Tanzania is set to take place on July 4 in Dar es Salaam.

Biwott said evidence shows that for countries like Kenya to transition to higher income economies, they must invest in exports development and promotion.

Jas Bedi, the Chairman of the EPC said Kenya will in future focus on an export led economic growth model.

Bedi said the country’s objective is to ensure that Kenya achieves an overall trade surplus so as increase its foreign exchange earnings.

He said Africa is now a key target market for Kenya’s manufactured goods especially with the signing of the Africa Continental Free Trade agreement.

The chairman noted that between 2017 and 2016, Kenya’s exports to the continent declined to 38 percent from 40 percent of total exports due to challenges faced by exporters including tariffs and non-tariff barriers.

Bedi added that Kenya’s goal of becoming a regional manufacturing hub will be achieved faster if access to the continent is increased even further. Enditem

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